Beijing said Friday that talks aimed at ending the dispute would resume next week.
The People's Bank of China said the reserve requirement ratio will be lowered by 1.0 percentage point, with the stimulus going into effect later this month.
The reduction is being made in two equal stages, effective January 15 and January 25, the PBOC said.
The policy move was announced hours after Chinese Premier Li Keqiang told the central bank to make universal cuts of the ratio as part of Beijing's efforts to bolster economic growth having cut the RRR four times previous year.
The order from Li to the central bank, which is part of the Chinese government, showcased Beijing's willingness to go further in policy easing to keep its economic growth on track.
"It is hard to clearly understand the overall policy effect as every institution has to make their own calculations", said Ding Shuang, chief Greater China economist at Standard Chartered Bank.
Bolsonaro confirms eventual embassy move to Jerusalem
He said Brazil now seeks closer economic ties with the U.S. and that there can be military agreements between the two countries. We are aware of the intentions of the dictatorship of [Venezuelan President Nicolas] Maduro.
China predicts a GDP growth of 6.5% in 2018, compared with 6.9% in 2017.
The effectiveness of a move by China's central bank to inject up to an expected 700 billion yuan into the world's second largest but worryingly slowing economy is hard to calculate given the lack of transparency in the monetary policy, warned a chief economist.
Bank officials say the measure will unleash 800 billion yuan, or about 116 billion dollars, into the market and effectively increase loan funding sources of small and private businesses.
China International Capital Corp said that may release as much as 400 billion yuan of liquidity.
After four RRR cuts so far this year, the ratio for large banks dropped to 14.5pc in October, the lowest level since 2008. "US President Trump said in a Cabinet meeting at White House on Wednesday that US-China trade discussion "is coming along very well", while China's former vice commerce minister Wei Jianguo told Bloomberg on Thursday that the odds of a US-China trade deal are rising because both sides have a clearer sense of each other's goals and intentions", Scotiabank commented.
Lian Ping, chief economist at the Bank of Communications, said the pressure of the economic slowdown would show up in the first half of 2019 when the existing United States tariffs on US$250 billion of Chinese goods would bite deeper into the economy.